Question

Requirements 1. Journalize required​ transactions, if​ any, in ​'s general journal. Explanations are not required. 2. What is the balance in Estimated Warranty Payable assuming a beginning balance of​ $0?

Answer 1

1.

April 30

No entry required

June 30,

DR Warranty Expense ................................................... $15,200

CR Estimated Warranty Payable....................................................$15,200

Working

Warranty Expense = 380,000 * 4%

= $15,200

Jul 28

DR Estimated Warranty Payable.......................................$5,900

CR Cash..................................................................................................$5,900

September 30

DR Loss from Lawsuit ..........................................................$ 70,000

CR Estimated Lawsuit Payable............................................................$70,000

December 31

DR Warranty Expense ..........................................................$20,000

CR Estimated Warranty Payable..........................................................$20,000

Working

Warranty Expense = 500,000 * 4%

= $20,000

2. Estimated Warranty Payable is a liability account so credits increase it and debits reduce it.

Balance;

= Credits - Debits

= 15,200 + 20,000 - 5,900

= $‭29,300‬